PITTSBURGH–(BUSINESS WIRE)–The Federal Home Loan Bank of Pittsburgh announced today unaudited financial results for the first quarter of 2024.
Financial Highlights:
- First quarter net income of $154.0 million
- First quarter net interest income of $195.7 million
- Declared a first quarter dividend on activity stock at 8.75% annualized
- Declared a first quarter dividend on membership stock at 5.60% annualized
Credit Products Highlights:
- Advances at $72.9 billion
- Mortgage loans held for portfolio, net at $4.7 billion
- Letters of credit at $28.7 billion
Credit Products Highlights:
- Allocated $17.2 million to the Affordable Housing Program (AHP) for use in 2025
- Voluntary contributions of $7.0 million to community investment products
Statements of Income
FHLBank’s net income totaled $154.0 million for the first quarter of 2024, compared to $123.2 million for the first quarter of 2023. The $30.8 million increase in net income was driven primarily by the following:
- Net interest income was $195.7 million for the first quarter of 2024, an increase of $38.3 million from $157.4 million during the same prior-year period.
- Interest income was $1,539.1 million for the first quarter of 2024, compared to $1,239.0 million in the same prior-year period. This increase was driven by higher short-term interest rates, higher average advance balances, and higher earnings on mortgage-backed securities (MBS) due to growth in the portfolio.
- Interest expense was $1,343.4 million for the first quarter of 2024, compared to $1,081.6 million in the same prior-year period. This increase was the result of higher short-term interest rates and higher average consolidated obligations.
- Noninterest income was $14.9 million for the first quarter of 2024, compared to $7.1 million in the same prior-year period. This $7.8 million increase was due primarily to: (1) valuation changes in FHLBank’s derivative and trading security portfolios, resulting from market volatility and (2) higher letter of credit fees earned.
- Other expense was $31.1 million for the first quarter of 2024, compared to $26.1 million in the same prior-year period, an increase of $5.0 million. This increase was primarily driven by higher compensation and benefits from higher headcount and costs associated with technology and other strategic initiatives.
- Voluntary contributions were $7.0 million for the first quarter of 2024, compared to none in the same prior-year period. This increase was driven by the timing of the expense recognition of the contributions to voluntary community investment products and includes a voluntary contribution to AHP of $0.7 million.
- First quarter 2024 performance allowed FHLBank to allocate $17.2 million to AHP.
Statements of Condition
At March 31, 2024, total assets were $106.2 billion, compared with $112.1 billion at December 31, 2023. The decrease was primarily due to a decrease in advances, which totaled $72.9 billion at March 31, 2024, compared to $78.4 billion at year-end 2023. Member demand for advances continues to be primarily driven by members’ liquidity risk management practices, as well as sustained competition for deposits following Federal Reserve actions to increase short-term interest rates. Although advance levels decreased, it is not uncommon for FHLBank to experience fluctuations in the overall advance portfolio driven primarily by changes in member needs.
Total capital at March 31, 2024, was $5.5 billion, compared to $5.7 billion at December 31, 2023, including retained earnings of $1.9 billion at March 31, 2024, compared to $1.8 billion at December 31, 2023. At March 31, 2024, FHLBank remained in compliance with all regulatory capital requirements.
Dividends
The Board of Directors declared a dividend on subclass B1 (membership) stock equal to an annual yield of 5.60% and a dividend on subclass B2 (activity) stock equal to an annual yield of 8.75%. These dividends will be calculated on stockholders’ average balances during the period January 1, 2024, to March 31, 2024, and credited to stockholders’ accounts on April 26, 2024.
Looking forward, market and business conditions, including strategic initiatives, can impact FHLBank’s overall performance, as well as the levels of future dividends. FHLBank’s intent is to continue to provide meaningful shareholder return; future dividend rates may not correspond directly with the pace or direction of interest rate changes.
Detailed financial information regarding first quarter 2024 results will be available in FHLBank’s Quarterly Report on Form 10-Q, which FHLBank anticipates filing no later than May 13, 2024.
About FHLBank Pittsburgh
FHLBank Pittsburgh provides reliable funding and liquidity to its member financial institutions, which include commercial and savings banks, community development financial institutions, credit unions and insurance companies in Delaware, Pennsylvania and West Virginia. FHLBank products and resources help support community lending, housing and economic development. As one of 11 Federal Home Loan Banks established by Congress, FHLBank has been an integral and reliable part of the financial system since 1932. Learn more by visiting www.fhlb-pgh.com.
